Fiscal Year 2014 Current Activities and Operations

The operations of the New York City Municipal Water Finance Authority (“NYW”) consist of executing the requirements of its indenture and other governing documents. NYW finances the ongoing capital needs of the water and sewer system of the City of New York (the “System”) with proceeds from the issuance of commercial paper notes, bond anticipation notes (“BANs”) and long-term bonds. The Authority uses these proceeds to reimburse the City of New York’s general fund for capital expenditures incurred on behalf of the System. NYW complies with federal tax law to preserve the tax exemption of its debt. NYW also maintains various contractual obligations necessary to achieve efficient and cost-effective financing and administers its outstanding debt and investments portfolio by monitoring and directing application of funds to meet debt service on its bonds and notes.

NYW issued $700 million of extendible municipal commercial paper notes Series 7, $300 million of extendible municipal commercial paper notes Series 8 and $375 million of commercial paper notes Series 1.

On July 11, 2013, the Authority issued to EFC $401.1 million and $213.9 million of new money and refunding fixed rated Second Resolution Revenue bonds, Fiscal 2014 Series 1 and Fiscal 2014 Series 2, respectively. The source of funds to the Authority for the bonds was from tax-exempt bonds issued by EFC (2013 A). Proceeds from Series 1 were used to refund Fiscal 2003 Series 5 and Fiscal 2004 Series 1 and proceeds from Series 2 were used to retire commercial paper notes Series 6 and pay for new money projects.

On September 17, 2013, the Authority issued $650.9 million of new money tax-exempt adjustable rate Second Resolution Revenue Bonds, Fiscal 2014 Series AA. The bonds are backed by standby bond purchase agreements from four banks. These bonds will mature in 2048, 2049 and 2050. The proceeds were used to refund the Authority’s commercial paper notes, pay for new money projects, pay the principal and interest on BANs and pay the costs of the issuance of the bonds.

On October 21, 2013, the Authority issued Fiscal 2014 Series 3 BANs to EFC in the amount of $320 million. The Authority has drawn $109 million as of June 30, 2014. The BAN will mature on October 21, 2016.

On November 21, 2013, the Authority issued $397.1 million of new money tax-exempt fixed rate Second Resolution Revenue Bonds, Fiscal 2014 Series BB. This bond issue included term bonds maturing in 2046. The Authority used the proceeds to refund commercial paper notes and pay the cost of issuance of the bonds.

On February 6, 2014, the Authority issued $351.2 million of new money tax-exempt fixed rate Second Resolution Revenue Bonds, Fiscal 2014 Series CC. The bonds included term bonds maturing in 2047. The Authority used the proceeds to refund commercial paper notes and to pay costs of issuance. The 2014 Series CC bond issue included two refundable principal installment bonds maturing in 2018 and 2019.

On March 27, 2013, the Authority issued to EFC $347.4 million of refunding Second Resolution Revenue Bonds, Fiscal 2014 Series 4. The Authority used the proceeds to refund the outstanding principal of its Fiscal 2005 Series 1 bonds, partially refund the outstanding principal of its Fiscal 2004 Series 2 and Fiscal 2005 Series 2 bonds, and to pay the costs of issuance.

On April 3, 2014, the Authority issued $547.9 million of refunding tax-exempt fixed rate Second Resolution Revenue Bonds, Fiscal 2014 Series DD. The bonds included serial and term bonds maturing in 2039. The Authority used the proceeds to refund the Authority’s outstanding First Resolution Revenue Bonds, Fiscal 2004 Series B, Fiscal 2004 Series C and Fiscal 2005 Series A and to pay the costs of issuance.